Archive
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News
Interlinkages and Systemic Risk: Institute-sponsored Conference in Italy on July 4-5
Jul 2, 2013
The Institute have organized a Workshop on “Interlinkages and Systemic Risk” in Ancona, Italy that will take place on July 4th and 5th.
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Working Paper
Grantee paperFrom Green Users to Green Voters
Jun 2013
We estimate the effect of the diffusion of photovoltaic (PV) systems on the fraction of votes obtained by the German Green Party.
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Article
Dirk Bezemer - Debt: The Good, the Bad, and the Ugly
Jun 26, 2013
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Video
Why We Need To Rethink Economics
Jun 25, 2013
In this short interview, Institute co-founder George Soros tackles the question at the heart of the Institute’s mission: What’s wrong with economics and what can we do to change it?
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Article
Thirteen Ways to Split a Cake*
Jun 19, 2013
Axiomatic bargaining is presented in MWG in the context of welfare economics (Ch. 22), the aim being the formulation of reasonable criteria for dividing gains resulting from cooperative endeavors (the “joint surplus”). It is further presented as an application of cooperative game theory, in which an arbitrator distributes the joint surplus in a manner that reflects “fairly” the bargaining strength of the different agents (although we could conceive of a situation where the parties are bargaining without an external party). If bargaining fails, the outcome is the parties’ own fallback positions (the threat point, or status quo).
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Article
The Entrepreneurial State: Debunking Public vs. Private Sector Myths
Jun 12, 2013
is the public sector really sclerotic and conservative in contrast with a dynamic and innovative private sector?
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Article
On the Link between Inequality, Credit, and Macroeconomic Crises
Jun 12, 2013
To what extant do existing mainstream models properly address issues such as heterogeneity and interactions, which are considered central ingredients to understand economic crises as emergent, endogenous phenomena.
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Video
Playing with the History of Economics
Jun 10, 2013
How to become a historian of economic thought? Members of the profession gather just once a year at the annual conference of the History of Economic Society but otherwise are dispersed in universities and archives all around the world.
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Article
Middle-Out Economics: A Truer Form of Capitalism
Jun 10, 2013
“Four men sat at a table. Raised sixty floors above the city, they did not speak loudly as one speaks from a height in the freedom of air and space; they kept their voices low, as befitted a cellar.”
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Article
Growth, Debt, and Past versus Future: A Visual Elaboration
Jun 5, 2013
How does debt influence growth?
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News
Restoring Accountable Governance
Jun 3, 2013
Collective Action When Market Forces Overwhelm the Nation State
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Working Paper
Conference paperGWAS of 126,559 Individuals Identifies Genetic Variants Associated with Educational Attainment
May 2013
A genome-wide association study (GWAS) of educational attainment was conducted in a discovery sample of 101,069 individuals and a replication sample of 25,490. Three independent single-nucleotide polymorphisms (SNPs) are genome-wide significant (rs9320913, rs11584700, rs4851266), and all three replicate.
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Article
Helicopter money as a policy option
May 29, 2013
‘Helicopter money’ may in some circumstances be the only certain way to stimulate nominal demand
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Article
Dancing in the Dark: Creating an Economics for the 21st Century
May 12, 2013
In the wake of the 2008 financial crisis, many of our policy makers and top economists are still stumbling in the dark.
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News
Institute Grantee Vamsi Vakulabharanam Wins Amartya Sen Award for ‘Distinguished Social Scientists’ in India
May 12, 2013
Dr. Vamsi Vakulabharanam, an associate professor of economics at the University of Hyderabad and a grantee of the Institute for New Economic Thinking, has won the prestigious Amartya Sen Award, a newly instituted honor given by the Indian Council for Social Sciences Research (ICSSR).
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Working Paper
Grantee paperTechnology Diffusion: Measurement, Causes and Consequences
Apr 2013
This chapter discusses different approaches pursued to explore three broad questions related to technology diffusion: what general patterns characterize the diffusion of technologies, and how have they changed over time; what are the key drivers of technology, and what are the macroeconomic consequences of technology.
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Article
More Services Means Longer Recoveries
Apr 28, 2013
Recovery from recessions takes longer than it has in the past.
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Article
The rise of economics as engineering II: the case of MIT
Apr 24, 2013
Looming behind the aforementioned narratives of postwar economics is a notion – economics as engineering – which at times appears as a metaphor and at times stands for a straight depiction of economists’ professional milieu and practices.
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Article
The rise of economics as engineering I : setting the scene
Apr 23, 2013
The rise of the economist as engineer is, economists and historians say, an essential characteristic of the development of economics in the postwar period.
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Article
Economics Needs Replication
Apr 23, 2013
The recent debate about the reproducibility of the results published by Carmen Reinhart and Kenneth Rogoff offers a showcase for the importance of replication in empirical economics.
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Article
Young Scholars Will Bring New Economic Thinking
Apr 23, 2013
So why am I hopeful about the future?
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Article
A chronology of economics at Carnegie (in progress)
Apr 22, 2013
To illustrate the previous post on the difficulties in putting together a chronology, here is tentative chronology of economics at Carnegie. It’s still in process, and links, sources and entries will be updated as I read.
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Article
Lending in the Dark: China's Shadow Banking Sector
Apr 22, 2013
The proliferation of China’s opaque, loosely regulated (or unregulated) shadow-banking system has been raising fears of possible financial instability. But just how extensive – and how risky – is shadow banking in China?
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Article
On the difficulty of assembling a chronology and other F....moments in history of economics research
Apr 21, 2013
This year, I’m sharing an office with an econometrician on Mondays and with a geographer on Fridays (you don’t want to go into the subtleties of the French educational system).
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Article
History of applied economics: now what?
Apr 17, 2013
There is a “tendency to neglect applied economics in writing the history of economic thought,” Roger Backhouse and Jeff Biddle remarked in 2000. They then followed the “applied” trail back into the XIXth and early XXth centuries, at a time the scope and nature of economics were debatted by continental and especially British political economists
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Article
Grantee Arindrajit Dube Examines Reinhart and Rogoff's Causal Claims
Apr 17, 2013
Reinhart and Rogoff’s 2010 paper “Growth in a Time of Debt” has recently come under scrutiny
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Article
Reinhart and Rogoff Respond to Criticism
Apr 16, 2013
INET Advisory Board members Carmen Reinhart and Kenneth Rogoff today issued a response to recentcriticism of their paper “Growth in a Time of Debt.” Their response in full is below.
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Article
Keynesianism, neoliberalism and the 'Dissemination' of Economic Ideas: That's the Way of the World.
Apr 15, 2013
It is often argued that in recent years the question of the ‘dissemination’ of economic knowledge has been increasingly addressed by historians of economics.
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News
Forging an East-West Dialogue at INET Hong Kong
Apr 14, 2013
A three-day conference, hosted by the Institute for New Economic Thinking, the Fung Global Institute and the Centre for International Governance Innovation, has drawn to a close.
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Article
Why Raising the Minimum Wage Makes Economic Sense
Apr 13, 2013
A minimum wage is a small minnow in an ocean of deficient aggregate demand
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News
A slipping taboo
Apr 11, 2013
The Economist profiles INET’s Hong Kong conference
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Working Paper
Conference paperCentral Banks in Balance Sheet Recessions: A Search for Correct Response
Apr 2013
These are extraordinary times for central banks. Near zero interest rates and massive liquidity injections are still failing to bring life back to so many economies in the developed world.
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Working Paper
Conference paperNew Metrics for Economic Complexity: Measuring the Intangible Growth Potential of Countries
Apr 2013
In this paper we provide a summary and a guide to the literature for a new line of research which goes under the name of Economic Complexity and is partly performed incollaboration with INET.
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Working Paper
Conference paperEconomics and the Powerful: Faulty Analysis, Economic Advice, and the Imperatives of Power
Apr 2013
“Look! Up there in the sky! What is it? Is it a plane? Is it a bird?” No, it’s a distraction from the robbery that is taking place in broad daylight on the ground.
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Working Paper
Conference paperToward a Supply-Side Theory of Financial Innovation
Apr 2013
Innovation. The word is evocative of ideas, products and processes which have somehow made the world a better place. Prior to the global financial crisis, many viewed financial innovation as unequivocally falling into this category.
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Working Paper
Conference paperThe Future of Central Banking
Apr 2013
The exteriors of major central banks may be solid marble and doric columns, but, inside, monetary policy remains a work in progress.
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Conference Session
Economics and the Powerful: Faulty Analysis, Economic Advice and the Imperatives of Power
Apr 5, 2013 | 12:00—01:30
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Conference Session
Growth and Technological Change in Complex Systems
Apr 5, 2013 | 10:30—11:45
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Conference Session
The Future of Central Banking
Apr 5, 2013 | 02:30—04:30
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Conference Session
Financial Stability Working Group
Apr 5, 2013 | 08:30—10:45
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Working Paper
Conference paperPoles Apart? Party Polarization and Industrial Structure in American Politics Now
Apr 2013
Only a few years ago, comparisons of American politics to opéra bouffe were not outrageously farfetched at least if you were not poor or sick.
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Working Paper
Conference paperAusterity, Polarity and the Prospect of Regime Change: China
Apr 2013
Since the dawn of this millennium, and long before the current financial turmoil and the subsequent bitter pill of austerity therapy hit the Untied States and the European Union, the Chinese Communist Government has publicly recognized the monumental challenge of polarity.
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Working Paper
Conference paperAssessing Development
Apr 2013
There are a number of possible purposes in assessing the level of economic development of a country or part of a country. The assessment may provide an incentive for better development, particularly if it can be compared meaningfully with assessments for other countries.
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Conference Session
Austerity, Polarization, and the Prospect of Social Disorder
Apr 5, 2013 | 06:50—08:20
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Conference Session
What is Development?
Apr 5, 2013 | 08:30—09:15
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Conference Session
Inequality in China
Apr 5, 2013 | 05:50—07:20
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Article
Voth vs. Ferguson: And How Austerity Leads to Worse Outcomes
Apr 5, 2013
At dinner yesterday Niall Ferguson made the argument that China (or the East) were perhaps no longer looking to how Western countries had built their social institutions and formed their empires, and were instead now doing their own thing as the Western approach was shown to be flawed
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Conference Session
Inequality in China, India and America: Causes and Consequences
Apr 5, 2013 | 05:15—06:45
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Working Paper
Conference paperDomestic Rebalancing to Reduce Global Imbalances: The Role of Financial Market Measures
Apr 2013
“Taking advantage of the opportunity offered by the structural adjustments of the global economy…”The decisions on the four modernisations taken at the Third Plenum represented a radical change in Chinese domesticdevelopment strategy.
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Working Paper
Conference paperMeritocracy Is a Good Thing
Apr 2013
Political meritocracy is the idea that a political system is designed with the aim of selecting political leaders with above average ability to make morally informed political judgments. That is, political meritocracy has two key components: (1) the political leaders have above average ability and virtue and (2) the selection mechanism is designed to choose such leaders.
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Working Paper
Conference paperIrreducible Uncertainty and its Implications: A Narrative Action Theory for Economics.
Apr 2013
At the heart of economics is a theory of action. It reflects views about how human beings make economic decisions and leads to an analysis of aggregate consequences.
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Working Paper
Conference paperA Keynes-IKE Model of Currency Risk: A CVAR Investigation
Apr 2013
A core puzzle in Önancial economics is the inability of standard risk-premium models to account for excess returns in currency and other asset markets.
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Working Paper
Conference paperMarket Psychology, Animal Spirits and Reflexivity
Apr 2013
Neoclassical economics has abolished the role of psychology in decision making by assuming that all individuals are rational optimizers with rational expectations about future events.
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Conference Session
China in the World: Growth, Adjustment and Integration
Apr 4, 2013 | 11:45—01:15
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Conference Session
The Imperfect Knowledge Economics (IKE) Approach to Modeling An Open World
Apr 4, 2013 | 09:50—10:30
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Conference Session
What is the Role of Psychological Considerations in Economics?
Apr 4, 2013 | 09:50—11:30
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Working Paper
Conference paperThe Law-Finance Paradox
Apr 2013
The global financial crisis led to the rediscovery of ‘fundamental uncertainty’. Incorporating uncertainty into the analysis of financial markets alters our understanding of how these markets operate and expose the two-faced role of law in finance.
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Conference Session
Capitalism and the Rule of Law
Apr 4, 2013 | 02:30—04:30
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Working Paper
Conference paperRationality and the Meese and Rogoff Exchange-Rate-Disconnect Puzzle: Learning vs. Contingent Knowledge
Apr 2013
There is much anecdotal evidence in the popular media, backed up by survey research, that participants in currency markets pay close attention to fundamental economic variables in forming their forecasts of future exchange rates.
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Working Paper
Conference paperThe Contingent Expectations Hypothesis: Rationality and Contingent Knowledge in Macroeconomics and Finance Theory
Apr 2013
For macroeconomists, an individual is rational if she uses her understanding of the way the economy works in making decisions that do not conflict with her objectives.
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Working Paper
Conference paperRationality in the Present-Value Model of Stock Prices: Fundamentals, Psychology, and Structural Change
Apr 2013
The present-value model of stock prices is a workhorse in financial economics. The model relates today’s price of a stock (or a basket of stocks) to the market’s forecasts of next-period’s price and dividend, appropriately discounted.
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Working Paper
Conference paperForward-Rate Bias, Contingent Knowledge, and Risk: Evidence from Developed and Developing Countries
Apr 2013
In this paper, we examine one of the core puzzles in International Macroeconomics, the so-called “forward-discount anomaly.”
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Working Paper
Conference paperThe Econometrics of Imperfect Knowledge Economics
Apr 2013
A core premise of contemporary economic models is that researchers can adequately specify in probabilistic terms how individuals alter the way they make decisions and how the processes underpinning market outcomes unfold over time.
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Working Paper
Conference paperExpectational coordination failures and Market outcomes’ volatility
Apr 2013
The first part of this text comes back on the standard economic viewpoint on expectational coordination, a viewpoint that the recent events have challenged.
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Working Paper
Conference paperThe State, the Market and the Rule of Law
Apr 2013
State and market are often depicted as distinct, even antagonistic. Markets appear as natural products of spontaneous ordering; states as leviathans that if left untamed will distort, if not destroy markets’ natural state.
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Working Paper
Conference paperEndogenising Uncertainty
Apr 2013
Uncertainty is an unavoidable feature of economic life, although we may cope with it sometimes by ignoring it. Institutions, conventions and behaviour are all conditioned by uncertainty, and they in turn condition uncertainty in a reflexive manner.
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Conference Session
Time and Expectations in Economic Analysis
Apr 4, 2013 | 08:45—09:45
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Working Paper
Conference paperAddressing the Crisis in the Euro Zone System
Apr 2013
The reason why the Euro zone crisis has dragged on for so long is that Europe’s leaders have focused too much on short-term measures to patch up the emergency of the moment, rather than formulating a comprehensive plan.
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Working Paper
Conference paperTowards a New Monetary Constitution in Europe: The Proposal of the German Council of Economic Experts (GCEE)
Apr 2013
After the announcement of Mario Draghi, the ECB president, to do “whatever it takes” to preserve the integrity of the European Monetary Union (EMU) in July 2012 and the establishment of the Outright Monetary Transactions (OMT) program in September 2012, the crisis of EMU is far from being resolved.
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Working Paper
Conference paperIs Mercantilism Doomed to fail? China, Germany, and Japan and The Exhaustion of Debtor Countries
Apr 2013
Mercantilism, Accumulation of Foreign Exchange Reserves, and RMB Internationalization
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Working Paper
Conference paperSurveillance, Regulation and Supervision -a solution for the euro?
Apr 2013
Regulation and supervision of banks and financial markets are now upgraded in the euro area. Surveillance of macroeconomic performance of all EU countries is also intensified.
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Working Paper
Conference paperIf Not Now, When? Financial Reform Must Not Await Another Crisis
Apr 2013
In the first ten chapters of our book, The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It, we discuss banking and the economics of funding as it applies to banks.
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Working Paper
Conference paperThe European Tragedy: What Way Out?
Apr 2013
Europe can choose its musical accompaniment. In Berlin, 50 Cent’s All Things Fall Apart has just had its premiere. Or go back to Giuseppe Verdi, born two hundred years ago.
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Conference Session
The Euro Zone Currency System: Catalyst or Wrecking Ball of the European Union?
Apr 4, 2013 | 07:15—08:45
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Conference Session
The RMB and The Future of Asian Finance
Apr 4, 2013 | 05:15—06:45
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Conference Session
Financial Stability Research Program
Apr 4, 2013 | 07:15—08:45
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Working Paper
Conference paperRenminbi Internationalization: Tempest in a Teapot?
Apr 2013
Internationalization of the renminbi is a stated goal of the Chinese government, its brief flirtation with Special Drawing Rights and an Asian Currency Unit notwithstanding. Chinese officials understand that a dollar-centric international monetary and financial system is a mixedblessing.
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Conference Session
Business Leaders Panel: The Future of the World and Asia's Role
Apr 4, 2013 | 04:00—05:00
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Article
I like IKE
Apr 4, 2013
Imperfect knowledge economics, or IKE to their friends, is popular with all the popular kids. George Soros, Bill Janeway and Anatole Kaletsky were in attendance as Roman Frydman and Michael Goldberg - or more properly, their students - showed the latest work in progress.
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Article
Japan's Money Base Will Be 45% of GDP: US and UK is 19%-21%
Apr 4, 2013
Japan is going to double its money supply, according to today’s front page of the Financial Times (5 April 2013), and a salient question might be what we should compare that to. It sounds like a lot, but is it?
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Article
Where the World Economic Association Started
Apr 4, 2013
Having lunch next to Edward Fullbrook he told me the story of how the post-autistic economic review got its start, leading to what we today know as the World Economic Association and all the great work coming from this community.
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Article
Great Hospitality or Chance to Innovate?
Apr 4, 2013
Some personal touches to hospitality at the INET conference, although I feel for the people who have been holding that sign all day.
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Article
Kuhn vs Lakatos: it is not the institute of anything goes...
Apr 4, 2013
In his opening remarks, Robert Johnson said that this “is not the institute of anything goes” with INET now getting to a point where it needs to stop criticising the mainstream and should instead “create a new vision.”
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Webinars and Events
Changing of the Guard
PlenaryApr 4–7, 2013
The Institute for New Economic Thinking held its annual plenary conference in Hong Kong from April 4-7, 2013 at the InterContinental Hotel in Kowloon. The event discussed Asia’s emergence in the global economy and other core issues.
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Working Paper
Conference paperSomething for Everyone: Building Incentives for Innovation Ecosystems
Apr 2013
Healthy innovation economies are the main driver of prosperity in the 21st century. But the three players that have traditionally sponsored basic research and invention in those economies are no longer willing or able to perform that role.
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Conference Session
Growth Adjustment and Convergence in Asia: The Challenge Ahead?
Apr 3, 2013 | 08:20—09:15
The developed economies of Europe, North America, and Japan are facing tremendous challenges related to indebtedness and stagnation. How will the developing economies of Asia respond to this challenge as they reorient their growth strategies to meet the rising aspirations oftheir people?
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Conference Session
Intersubjectivity: René Girard's Vision of Mimetic Desire and Economic Dynamics
Apr 3, 2013 | 10:45—11:15
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Conference Session
Innovation Systems
Apr 3, 2013 | 09:15—10:15
The Foundations of Economic Prosperity: The Lessons of Innovation Process and History
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Working Paper
Conference paperScarcity, Preferences and Cooperation: A Mimetic Analysis
Apr 2013
In “The Ambivalence of Scarcity” which is my contribution to L’Enfer des choses. René Girard et la logique de l’économie, written by Jean-Pierre Dupuy and originally published in French in 1978, I attempt to apply mimetic theory to modern economics and to economicphenomena, and also to explain why economic issues and economics as a discipline occupy such an important place in the modern world.
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Working Paper
Conference paperMonetary and Financial Stability: Lessons from the Crisis and from classic economics texts
Apr 2013
My remarks today will be focused primarily on features of the developed world’s financial system which led to the crisis of 2008 and to the Great Recession that followed, from which we are only slowly and painfully emerging.
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Working Paper
Conference paperComments by William White on the Presentation by Lord Adair Turner
Apr 2013
In his recent lecture at the Cass Business School, Lord Turner noted that even mentioning the possibility of overt monetary financing was akin to breaking a taboo.
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Working Paper
Conference paperDavid Sainsbury: Innovation Systems
Apr 2013
A striking feature of the neoclassical economic theory which has been dominant in Western universities in recent years is that it has had so little to say about innovation and innovation policy which is useful for policy-makers.
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Working Paper
Conference paperCrisis and the Sacred
Apr 2013
It would be nonsensical to blame economists for not foreseeing the crisis; even less for causing it. It was obvious there would be a crisis. It was impossible to foresee how it would start and evolve, and at what moment these events would occur.
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Working Paper
Conference paperIndividual Judgments, Social Values, and Mimetic Interactions
Apr 2013
The problem of value has always occupied a central place in economic thought and debate.
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Conference Session
Macroeconomic Policy and Economic Stability: Lessons of the Historical Experience with Fiat Money and the Implications for the Future
Apr 3, 2013 | 11:30—12:30
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Article
A new way of thinking in economics
Apr 2, 2013
What is the purpose of economics?
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Article
I Have to Act Like an Adult in Hong Kong
Apr 1, 2013
The INET conference in Hong Kong is serious business.
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Working Paper
Grantee paperIf Technology Has Arrived Everywhere, Why Has Income Diverged?
Mar 2013
We study the lags with which new technologies are adopted across countries, and their long-run penetration rates once they are adopted.
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Working Paper
Grantee paperThe Inevitability of Shadowy Banking
Mar 2013
Shadowy banking is safety-net arbitrage. It employs substitutes for products and activities performed within the traditional banking sector.
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Article
As Goes Cyprus, So Goes the European Union
Mar 31, 2013
All of a sudden, tiny Cyprus is making headlines. How could such a small country, with an economy approximately the size of the State of Maranhao, create such big problems?